Topics: Pharmacology, Drug development, Pharmaceutical industry Pages: 5 (1592 words) Published: July 27, 2008
The Institute for One World Health (IOWH), the first non-profit pharmaceutical company in the U.S., was founded in 2000 by Dr. Victoria Hale. The aim of this organization is to develop safe, effective, and affordable new medicines for people with infectious diseases in the developing world and thus help in improving global health. IOWH decided to find cures for diseases for which no drugs were available and no or little R&D had been conducted.

IOWH picks up the compounds, which due to the lack of commercial viability remained unexploited by the pharmaceutical companies, develops them, conducts pre-clinical and clinical tests, and obtains regulatory approvals for the drugs. IOWH is organized and managed as a regular pharmaceutical company with Dr. Hale at the helm as CEO. It employs full time staff and supported by volunteered experts as scientific advisors.

Business Model:
IOWH has an interesting model to circumvent the high R&D costs involved in pharmaceutical industry. Its business model is based on positioning IOWH as a credible potential company in the pharmaceutical industry to stimulate the inflow of funds from the prospective ‘donors’ and also to encourage other pharmaceutical and biotechnological companies to donate or share their valuable rights on their patent compounds which are not yet exploited fully. The functioning of the business model employs assembling an experienced and dedicated team of pharmaceutical scientists, identifying the promising compounds that could be developed into effective and affordable medicines and partnering with companies, hospitals and other organizations that share the same vision as that of IOWH and would help to advance IOWH towards its mission. IOWH also intends to partner with local manufacturing and distribution companies to ensure affordability and availability of the medicines to the patients in need. We identified the following key issues which are probably essential to sustain the business model of IOWH in the long run: 1.Sourcing of finance or funds

2.Identifying of the right and promising drug development opportunities 3.Getting steady intellectual donations from other pharmaceutical or biotechnological companies 4.Employing a dedicated, competent and experienced team of experts and scientists to work on the drug development process 5.Ensuring affordability and access of the developed drug to the patients in need through collaboration with manufacturing and distribution companies.

Most of the stakeholders of IOWH (donors, researchers, employees, manufacturers, distribution and delivery collaborators, and patients) can be categorized as well into the above five functional areas. We believe that if all the stakeholders share the same vision and goal as that of IWOH and are equally committed to achieve the same, IWOH business model might not only sustain but also flourish in the long run. Analysis of each of the above issues in detail is as follows:

1.Sources of Funds:
Steady sources of funds are the most important pillars of IOWH business model. IOWH started with the private donations and personal savings of Dr. Hale. When these funds evaporated, it started collecting funds through two new channels: individuals and charitable foundations. Donations from individuals are at present contributing a very minor part of overall funding which needs to be improved in subsequent years. IOWH has received $25 million from Bill & Melinda Gates Foundation in its first four years and would receive another round of $43 million soon to support the project base activities only. Currently it is heavily dependent on Gates Foundation which may not be good idea in the long term.

In the pharmaceutical industry, it typically takes 10-13 years to bring a drug to market and the costs incurred in the research and development process alone amount to around pounds 870m. Since IOWH starts with drug leads identification, it may be able to cut short the...
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